Dubai Off-Plan Property Delays: When Should Buyers Worry?

A common concern for those buying off-plan property in Dubai, particularly first-time buyers like SA from Dubai, is the potential for construction delays. SA purchased a property in 2023 with the intention of moving in upon the end of their current tenancy. The original handover was scheduled for this year, but the developer has since announced a delay, with construction appearing far from complete. Having paid 60% of the purchase price and continuing to pay Dh135,000 annually in rent, SA is understandably anxious. The developer attributes the delay to unavoidable circumstances covered by the Sale and Purchase Agreement's (SPA) grace period, but SA seeks clarity on when a delay becomes a serious issue.

The advice given emphasizes the distinction between advertised handover dates and contractual completion provisions within the SPA. Buyers are urged to scrutinize the SPA for the anticipated completion date, the contractual grace period, conditions for extensions, and available remedies for breaches. It's noted that many Dubai SPAs include grace periods, and UAE law permits a 12-month delay. Therefore, missing the initial advertised date does not automatically constitute a developer's breach.

A crucial point for end-users, like SA, is the tangible cost of each month's delay due to ongoing rent payments while capital is tied up in the unfinished property. While construction delays are not uncommon, indefinite assurances of imminent completion should be met with skepticism. Once the contractual long-stop date is known, buyers should request a revised completion program in writing from the developer. If the progress and the promised date seem incompatible, it is advisable to consult a property lawyer with the SPA and payment records to understand available options, such as withholding payments, cancellation, or seeking compensation. Importantly, buyers should not cease making installment payments due to project delays, as this could place them in default.

In a separate but related query, PK from Dubai faced an issue with a tenant in a recently purchased apartment. PK explicitly stated to the broker that the property was for personal use, not investment, and was assured the tenant would vacate shortly after the transfer. However, the tenant claims the eviction notice from the previous owner is invalid and requires a new 12-month notice from PK. This situation highlights the importance of due diligence before property transfer, especially for owner-occupiers.

The general principle is that purchasing a tenanted property does not automatically end the tenancy. The new owner assumes the previous landlord's obligations. While there has been debate regarding the necessity of a new eviction notice, recent Rental Disputes Centre (RDC) decisions suggest a properly served notice may remain effective post-sale. PK is advised to obtain and review the original eviction notice, checking its issuer, service details, reason, and vacate date. Dubai's regulations require a 12-month notice for owner occupation, with specific conditions for personal use. If vacant possession was a condition of the purchase, the notice should be reviewed promptly. The key takeaway for buyers of tenanted properties intended for personal use is to never assume the tenant will leave; always review the legal notice before signing and structure the purchase accordingly.